Tag Archives: spwr

SunEdison Bankruptcy Whispers Char SolarCity, First Solar, SunPower

SunEdison ‘s ( SUNE ) inferno continued Wednesday, a day after rumors flared that it might be in debtor-in-possession talks with creditors — often seen as a precursor to a Chapter 11 bankruptcy filing. In the stock market today , SunEdison stock plunged 15% to 1.27 and near its all-time low of 1.21 touched on Feb. 26. Shares have crashed 96% since July 20, when SunEd announced a bid to acquire installer  Vivint Solar ( VSLR ). Shares of Vivint Solar and of SunEd yield company TerraForm Power ( TERP ) fell 11% and 3.8%, respectively. The conflagration also charred SolarCity ( SCTY ), SunPower ( SPWR ) and First Solar ( FSLR ) stocks, which tumbled 10%, 7.6% and 4.3%, respectively. More broadly, IBD’s 21-company Energy-Solar industry group felt the burn, falling a collective 4.3%, its biggest single-day drop since Feb. 11. Axiom Securities downgraded SunEdison stock to a sell rating and lowered its price target to 22 cents from 39 cents. Intraday, Stifel Nicolaus suspended its rating on SunEdison stock. On Tuesday, SunEdison executives declined to comment on “market rumors and speculation.” SunEd is reportedly negotiating with holders of $725 million in second-lien loans, according to a report by Debtwire, cited by Reuters. SunEdison’s woes tie back to its plan to acquire Vivint Solar in July, S&P Global Market Intelligence analyst Angelo Zino told IBD earlier this month, after Vivint scrapped its sale to SunEd on financial worries. At the time, SunEd’s banks were reportedly hedging on the deal. SunEdison and TerraForm Power had just delayed their 10-K filings amid an ongoing investigation into SunEd’s liquidity stance. Now, TerraForm Power faces possible delisting after falling out of Nasdaq compliance, as well as a potential slew of investor class action lawsuits . Four law firms are investigating whether TerraForm Power violated securities laws.

Sunrun Unveils Tesla-Backed Storage In Net-Metering Rattled Hawaii

No. 2 residential solar installer Sunrun ( RUN ) could trigger Hawaiian solar growth with a Tesla Motors ( TSLA ) battery-backed storage offering following regulators’ 2015 decision to cut net-metering subsidies, a Credit Suisse analyst said Monday. And despite a bulkier subsidy cut in Nevada that doesn’t grandfather in existing customers, Sunrun will flare on its impressive access to capital, Credit Suisse analyst Patrick Jobin wrote in a research report. Jobin retained an outperform rating and 21 price target on Sunrun stock. Sunrun stock was up a fraction in afternoon trading on the stock market today , while shares of No. 1 installer  SolarCity ( SCTY ) were down 1%. IBD’s 21-company Energy-Solar industry group was down nearly 1%, after falling 1.5% Friday. It ranks No. 54 out of 197 groups tracked. Year to date, Sunrun and SolarCity stocks are down a respective 43% and 47%, under-performing the industry group that has fallen 22% on continued volatility in Nevada despite Congress’ late December extension to a key federal subsidy. Still, “industry dynamics continue to favor Sunrun and SolarCity and highlight increasing barriers to entry,” Jobin wrote. “Further, we were impressed with Sunrun’s ability to outmaneuver peers in the capital markets.” Jobin sees a 214% upside to Sunrun stock. Sunrun, SolarCity Curb 2016 Growth In Q4, Sunrun guided to 40% growth in 2016 vs. consensus expectations for 60%-80% growth, echoing SolarCity, which earlier indicated 44% growth vs. traditional annual growth of 80%. But Sunrun and SolarCity differ in their rationale. SolarCity is aiming to become cash flow positive. Sunrun is focusing on cost reductions and maximized returns and, this month, guided to a 15% year-over-year reduction in 2016 for its channel business . Instead, Sunrun now expects to double its direct business over the course of 2016. “The company is on the fastest path to reaching the ‘Holy Grail’ of residential solar leasing companies whereby the third-party capital can cover all upfront costs,” Jobin wrote. Sunrun also unveiled a solar-plus-storage solution coined BrightBox to reinvigorate Hawaiian solar growth, after the state suspended payments to solar customers for excess energy fed back into the grid. The state was at 17% solar penetration when that vote came down. Firms like SunPower ( SPWR ), SolarCity, SolarEdge ( SEDG ) and Sunrun have long worked to make solar storage economical. Without it, utilities must buy the excess energy fed back into the grid. In 2015, however, Nevada and Hawaii cut net-metering payments to solar customers. Within a day, SolarCity and Sunrun said they would exit Nevada, the latter threatening to file suit. Now, Sunrun has managed to reduce its solar storage costs by 50% year over year, Jobin wrote. BrightBox customers are expected to reduce their utility bills by 15%. “The adoption of solar plus storage, if economic, can mitigate the risk in other states if utilities degrade the economics of net-metered energy,” he wrote. And “a solar plus storage solution in Hawaii should allow growth to resume.” In Hawaii, neighborhood constraints have restricted new customers from adopting solar. The BrightBox solution circumvents those restrictions, allowing Sunrun to tap into the remaining 83% of the state without solar.

Glut Feeling: Chinese Solar Manufacturers Ignore ‘Bellwether’ Views

Chinese firms JA Solar ( JASO ), JinkoSolar ( JKS ) and Trina Solar ( TSL ) will force a solar panel glut in 2016, expanding capacity despite a 4.5-gigawatt demand cliff in Japan and the U.K., Credit Suisse analyst Patrick Jobin suggested Monday. Meanwhile, “bellwether” U.S. rooftop solar installers, including  SolarCity ( SCTY ), Sunrun ( RUN ) and Vivint Solar ( VSLR ), have cut their 2016 guidance by 0.6 GW, on average vs. initial expectations, Jobin wrote. European incentives and a Chinese boom oversupplied the market in 2012, causing prices to topple and manufacturers like SunPower ( SPWR ) to cut jobs. The upcoming glut puts higher-cost solar panel makers JA Solar and Trina Solar at heavy risk, Jobin says. On their Q4 earnings conference calls, all three acknowledged a potential 2016 supply glut, but “still announced capacity expansions, citing growth from efficiency improvements and higher capacity build outside China,” Jobin wrote in a research report. Jobin cut his price targets on JinkoSolar and Trina Solar to 40 from 42, and to 14 from 15, respectively. Midday, shares of Trina Solar and JinkoSolar were both down nearly 1% in early afternoon trading on the stock market today . JA Solar stock was up a fraction. Regulators in Japan and the U.K. recently announced cuts to solar feed-in-tariffs (FiT), key subsidies that triggered a surge in solar investment. In 2016, Jobin expects Japanese and U.K. demand to slow by a respective 2 GW and 2.5 GW. In the U.S., a much-lauded extension to the Investment Tax Credit (ITC) on solar installations pushed out installation of 1 GW to 2017, Jobin wrote. Globally, manufacturers see 10 GW in solar cell capacity expansions in 2016, vs. market demand for 6.1 GW. Demand is expected to slow to 11.5% growth in 2016 vs. 17% growth in 2015, Jobin wrote. Compounding that, manufacturers expect a 5%-10% decline in second-half 2016 average sales prices. “We anticipate the need for capacity expansion outside China, especially as the ITC extension improves the long-term demand outlook in the U.S., but we believe the timing and magnitude of new capacity builds may exacerbate oversupply and pressure margins,” he wrote. Among the three companies, Jobin prefers vertically-integrated JinkoSolar, which he says keeps internal production and outside sourcing costs low. But even a 1-cent per-watt decline in gross profits could reduce JinkoSolar, Trina Solar and JA Solar’s 2016 earnings by 33%, 38% and 58%, he said.